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Reaction to the budget cap

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Reaction to the budget cap
Apr 30, 2009, 5:09 PM

The introduction of the £40 million budget cap poses serious problems for half of the F1 teams and the idea of a two-tier system is an issue for e...

The introduction of the £40 million budget cap poses serious problems for half of the F1 teams and the idea of a two-tier system is an issue for everyone.

The reaction I have had today from ringing around the teams is that the independents welcome the move to a budget cap and are pretty happy with the level. They acknowledge that the engines being left out of it for 2010 provides an element of the 'glide path' that was being discussed in recent weeks, as does the exclusion of driver salaries and marketing costs. With those added on, for a top team, it's another £50 to £80 million.

However everyone is unhappy about the two -tier system, whereby teams can spend what they like but will lose out on the chance to have technical freedoms which the capped teams will enjoy, such as moveable front and rear wings and unlimited engine revs. This last one is a bit odd, because the more the engine revs the more it costs, so they can have the freedom, but they have to fit in into the budget.

Ferrari and BMW refuse to comment, but are clearly very unhappy. I get the impression that the manufacturer teams are getting together on this. They believe that there is still room for negotiation, that the story is not finalised yet. Time will tell. If the FIa refuses to budge we could have a serious fight on our hands and I'm not sure what kind of action the manufacturer teams would take.

They would prefer to act through FOTA, but that organisation is split down the middle on this issue, with the five independents in favour of the cap at this level and the five manufcaturers against it. The rallying point is the opposition to the two tier system and that will form the basis of the next FOTA meeting on May 6th.

Fresh from saving his team from sever punishment in Paris, Martin Whitmarsh said,

"As a member of FOTA, Vodafone McLaren Mercedes is of course supportive

of FOTA's recent efforts to reduce costs in Formula 1.

"Equally, we recognise the excellent work done recently by the FIA in

the area of cost-reduction.

"Having said all that, we understand that some teams' operational

budgets may still be unnecessarily high in the challenging global

economic situation in which we now find ourselves.

"Nonetheless, we believe that the optimal solution - which may or may

not include a budget cap, but which ideally would not encompass a

two-tier regulatory framework - is most likely to be arrived at via

measured negotiation between all parties.

"We at Vodafone McLaren Mercedes are happy to contribute to that process

as and when required."

Frank Williams also highlighted the two tier system for comment, although his team believes in the cap and thinks that £40 million in the right level. Williams stands to make a profit of £10- £15 million on that basis.

"Williams has supported the introduction of a budget cap since the idea was first put forward early in 2008," said Williams. "Since then FOTA has made tremendous steps forward on costs but the rationale for a budget cap has also grown even stronger.

"We would like to see all the teams operating to one set of regulations and under a budget cap in 2010 and that is the position we will be advocating within FOTA when we meet next week.

"We understand that this will represent a serious challenge for some of the teams but we expect that FOTA will work together to find a unified and constructive way to take the FIA's initiative forward."
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